Primary care physicians (PCPs) were tiered at the practice group level. Tiering placements were based on acombination of quality and cost measures. Each group was initially placed in the Standard Benefit tier andmoved to the Enhanced Benefit or Basic Benefit tier based on cost and quality performance. Quality measuresinclude a set of indicators reflecting nationally accepted and validated measures in two broad categories:Clinical Process and Patient Care Experience. Performance on cost was based on health status adjusted totalmedical expense per member per month (PMPM). Final tiering designation was based on a combination of cost and quality performance. This document explains the methodology for the quality measures.

Quality Indicators Used for Tiering

Quality measurement for each group was based on performance on a combination of Clinical Process andPatient Experience measures (described in our February 2008 mailing). All clinical process and patientexperience measures used for this purpose derive from nationally accepted and extensively validated indicatorsets (HEDIS and MHQP/CAHPS, respectively). The group was evaluated on a maximum of twenty-three (23)quality indicators (15 HEDIS and eight Patient Experience scores). For each quality indicator, BCBSMAidentified the sample size required to obtain stable and reliable information about group-level performance.Groups were only evaluated on the set of measures for which they have sufficient sample to provide stableand reliable information about performance. Other measures were considered too “noisy” to be used forassessment of the group’s performance.

Sufficient Data to Evaluate Quality for Tiering

Groups were only evaluated for overall quality for tiering if they had a sufficient number of eligible measures.

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All groups with sufficient sample on four or more HEDIS measures were considered eligible forevaluation of overall quality for the purposes of tiering.

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Groups with sufficient sample for only three HEDIS measures were only considered to have enoughinformation if two of these measures were screening/well-care indicators and the third was related toeither chronic or acute care management.

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Groups were considered to have

insufficient

data for purposes of evaluating quality for tiering if theyhad fewer than three HEDIS measures with sufficient sample for reliable measurement.Only groups with sufficient information on which to evaluate overall quality had the potential to achieveplacement in the Enhanced Benefit tier.

Performance Benchmark for Quality Measurement

For each quality indicator, the BCBSMA benchmark for tiering was set at the median score (50

th

Percentile)among our provider groups, and a “buffer” was created around the benchmark so that groups scoring veryclose to the benchmark, but still below it, were treated as having met the benchmark. The buffer methodologyensures that the risk of incorrectly classifying a group as below the benchmark is less than five percent.Among groups with sufficient data to be evaluated on quality, those meeting the benchmark for at least 40percent of their measures were designated as having passed the Overall Quality Threshold for tiering, and hadthe potential to be placed in the Enhanced Benefit tier. Those that did not meet the benchmark for at least 40percent of their measures did not pass the Overall Quality Threshold for tiering, and were placed in the BasicBenefit tier. We did not allow groups to be considered below the Overall Quality Threshold based solely onthe result of one or two measures. Thus, groups that could be evaluated on only three or four HEDISmeasures were classified as below the Overall Quality Threshold if they did not meet the benchmark for